10-K 1 biomoda10k123111.htm biomoda10k123111.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 

 
FORM 10-K
 

 
x  
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended: December 31, 2011

¨  
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file No. 333-90738
 
BIOMODA, INC.
(Exact name of registrant as specified in its charter)
 
NEW MEXICO
85-0392345
(State of incorporation)
(IRS Employer Identification No.)

609 Broadway NE, Albuquerque, New Mexico 87102
(Address of principal executive offices including zip code)
 
Issuer’s telephone number, including area code: (505) 821-0875
 
Securities registered under Section 12(b) of the Exchange Act: 
None
Securities registered under Section 12(g) of the Exchange Act: 
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  o   No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  o   No  x

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  o   No  x
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o
 
Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
¨
 
 Accelerated filer
¨
Non-accelerated filer
¨
 
 Smaller reporting company
x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes  o   No  x
 
The aggregate market value of the voting stock held by non-affiliates as of December 31, 2011, based upon the closing price of the registrant’s common stock on that date was $1,337,052.

The number of issuer’s shares of Common Stock outstanding as of April 18, 2012, was 175,863,963 shares.
 
 
Table of Contents
 
   
Page
Forward Looking Statements
 
PART I
     
Item 1.
4
Item 1A.
12
Item 2.
13
Item 3.
13
Item 4.
13
     
PART II
     
Item 5
14
Item 6.
15
Item 7.
15
Item 8.
20
Item 9.
50
Item 9A.
50
Item 9B.
51
     
     
PART III
     
Item 10.
52
Item 11.
53
Item 12.
55
Item 13.
56
Item 14.
56
Item 15.
57
     
58
 

 
 
Forward - Looking Statements

This Form 10-K contains forward-looking statements about the business, financial condition and prospects of the Company that reflect assumptions made by management and management’s beliefs based on information currently available to it. The Company can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of management’s assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, the Company’s actual results may differ materially from those indicated by the forward-looking statements.

The key factors that are not within the Company’s control and that may have a direct bearing on operating results include, but are not limited to, the acceptance by customers of the Company’s products, the Company’s ability to develop new products cost-effectively, the ability of the Company to raise capital in the future, the development by competitors of products using improved or alternative technology, the retention of key employees, and general economic conditions.

There may be other risks and circumstances that management is unable to predict. When used in this Form 10-K, words such as “believes,” “expects,” “intends,” “plans,” “anticipates,” “estimates” and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions. All forward-looking statements are intended to be covered by the safe harbor created by Section 21E of the Securities Exchange Act of 1934.
 
 
 
PART I

ITEM 1. BUSINESS

General

Biomoda, Inc. (“Biomoda”) is a development stage company incorporated in the state of New Mexico on January 3, 1990 (inception). Biomoda is hereafter referred to as the “Company.”

The Company has laboratories and offices at 609 Broadway NE, in Albuquerque, New Mexico, that are used for corporate operations and research and development activities. The mailing address is 609 Broadway NE, Albuquerque, NM 87102. The telephone number is (505) 821-0875.  Our website is www.biomoda.com.

On January 8, 2010, the Company dissolved Biomoda Holdings, Inc., a Nevada corporation incorporated August 12, 2003, as no longer necessary or useful for operations.

The Company

Biomoda is an in-vitro diagnostics company that develops assays, or tests, to detect cancer. These assays are performed in clinical reference laboratories using body-fluid samples. The technology is based on scientific work originally done at Los Alamos National Laboratory. Biomoda was issued a patent in January 2005, and has received a Divisional and a Continuation-In-Part (“CIP”) extension of that owned patent. The technology is based on a porphyrin molecule that has an affinity to bind with cancer cells in high concentrations and cause them to fluoresce under specific frequencies of light. The porphyrin molecule is easy to obtain, manufacture and use. This is a broad-based technology that works with a variety of cancers.

The Company is developing a product line of assays for a variety of cancers based on adaptations of this technology. While we believe the technology has great potential as a cancer screening tool for large populations, the true breakthrough may be its potential as a non-invasive diagnostic for multiple cancers.

Our first product, trademarked under the name CyPath®, is an assay for the detection of early-stage lung cancer. Lung cancer represents a large market with unmet diagnostic needs. The five-year survival rates for lung cancer are dismal, due in large part to the fact that this disease is typically diagnosed late in its progression. Our lung cancer assay tests deep-lung sputum which is collected from the patient, processed and incubated in the CyPath® molecular marker labeling solution, and then scored for cancer cells. This technology has the potential to diagnose other cancers as well. Biomoda has identified breast, circulating tumor cells (CTC), cervical, bladder, colorectal, oral, and prostate cancers as potentially significant business opportunities for the Company.

Market Need

According to the Centers for Disease Control, cancer is a leading cause of death in the United States, second only to heart disease. In 2010, nearly 600,000 Americans and more than 7 million people around the world lost their lives to cancer. In the United States, one in three women and one in two men will develop cancer during their lifetime. A quarter of all American deaths and about 15 percent of all deaths worldwide will be attributed to cancer. In some nations, cancer will surpass heart disease to become the most common cause of death.

Lung cancer claims more lives than the next four biggest cancers – colon, breast, prostate and pancreatic – combined. Survivability of lung cancer is extremely low.  Only 40 percent of patients diagnosed with lung cancer survive one year after being diagnosed. The five-year survival rate for lung cancer is a dismal 15 percent while five-year survival rates for breast and prostate cancer have improved to 87 percent and 99 percent, respectively, primarily due to early detection. Early-stage diagnosis for lung cancer will improve the survivability of the disease.
 
 
 
World of Medicine

Technological advances are shifting medicine to an individualized approach to treatment of disease. Personalized Disease Management is an overall direction being adopted within the medical community to address risk assessment, diagnosis, treatment and individual response to therapies. Biomoda’s technology will enhance this new paradigm in medicine with improvements in early-stage diagnosis based on risk stratification.

Within Personalized Disease Management, our CyPath® assay has the potential for widespread adoption by the medical community for the screening, diagnosis, monitoring and surveillance of cancers. The global market for an inexpensive, non-invasive, and accurate screening and diagnostic tool for early cancer diagnosis is largely unmet. Biomoda anticipates that our technology will also be used to monitor treatment and gauge patient responses to the efficacies of various therapies.
 
Business Model

The Company’s end customers are patients who should be screened for a cancer diagnosis based on their risk profile, whether they present with symptoms or not, and doctors that prescribe screening and diagnostic tests. The Company plans to develop assays for the screening and detection of multiple cancers including lung, breast, cervical, CTC, bladder, colorectal, oral and prostate cancers. Patient samples would be delivered to Biomoda clinical reference laboratories certified under the federal Clinical Laboratory Improvement Amendments (“CLIA”). Company laboratories will receive the sample, perform the assay, and deliver the test result to the physician who can then inform the patient of the diagnostic conclusion. Our business model utilizes Company central laboratories to perform testing to maximize profits and minimize risk to our intellectual property (“IP”) and patents.  As sales and revenues grow, Biomoda may seek a strategic partnership with national and international clinical laboratories to leverage each entity’s operations and expand Company sales and services.

Biomoda’s future clinical reference laboratories will seek reimbursement from Medicare/Medicaid and private insurers based on existing reimbursement codes. Biomoda performed a reimbursement code study in 2003, and determined that current codes exist and are economically feasible under Centers for Medicare & Medicaid Services (“CMS”) codes.  The CMS is a Federal agency within the U.S. Department of Health and Human Services.

Initial sales and revenues forecasts are based on development of an internal sales and manufacturing workforce that will take advantage of public monies available for economic development and job creation. This business model anticipates greater revenues than would be obtained through contract sales and manufacturing and provides for non-dilutive funding during the Company’s research and development phase when risks are greater.

Customers

Sales will be driven by physician referrals. Our initial marketing strategy is focused on creating a high profit margin on a relatively low-cost product that will benefit Biomoda and its strategic laboratory partners. This model offers significant economic incentives for our customers and partners to adopt the Biomoda technology.
 
 
The Company is establishing visibility and credibility within the medical community by actively raising awareness of our CyPath® assay. Biomoda has begun coordinated scientific collaborations and will follow completion of clinical testing by publishing results in research and clinical journals and presenting our findings at medical conferences. Biomoda is currently working with Christiana Care Health Services in Newark, Delaware, Waterbury Pulmonary Associates in Waterbury, Connecticut, Radiology Associates of Albuquerque in Albuquerque, New Mexico, the University of Texas Health Science Center at San Antonio in San Antonio, Texas, and the Saccomanno Research Institute at St. Mary’s Hospital and Medical Center in Grand Junction, Colorado. The Company hopes to engage in collaborations and collaborative studies with preeminent lung cancer researchers throughout the world. In 2011, Biomoda joined the Early Detection Research Network, an initiative of the National Cancer Institute at the National Institutes of Health, which provides an opportunity to collaborate with other researchers focused on the development of molecular technologies for the screening, early diagnosis and target-based treatment of cancer.

The Company will use detailing agents (specialized sales agents) to provide direct marketing efforts to physicians.

The Company’s proprietary Intellectual Property will be protected by using Biomoda clinical laboratories and through active, licensed-based strategic partnerships with national and international reference laboratories with emphasis on identifying laboratory partners that have business relationships with provider networks. This will enable us to develop strategic relationships with customer groups who have formal relationships with those who drive sales.

Competition

There is no commercial early lung cancer diagnostic on the market today.  In November, 2011, the National Comprehensive Cancer Network (NCCN) issued guidelines for use of low-dose spiral computed tomography (LDCT) to screen for lung cancer in high-risk individuals.  LDCT can be expensive, exposes patients to radioactivity, and can have a false-positive rate of greater than 96% for a single imaging.  Screening must be done as part of a series and with other diagnostic procedures to improve accuracy.  A high false-positive rate can lead to emotional and financial costs associated with false positive results and increases the physical harm to high-risk individuals from surgical resection of benign lesions.  LDCT also is the first step in diagnosis of lung cancer. A more accurate, less costly and less invasive diagnostic is needed to detect lung cancer in the early stages of the disease.

Competition falls into several segments: biomarkers, radiology, genomics, proteomics and methylation. The Company anticipates that CyPath® will be a complement to diagnostic tools described below as well as a stand-alone diagnostic. Biomoda products should be well positioned to work synergistically with new products entering the marketplace.

Biomarkers are used to indirectly identify cellular aberrations and disease. Biomoda’s pilot clinical trial demonstrated that CyPath® is a significant new biomarker for lung cancer. The Company is monitoring the activity of other companies in this space, and we believe our technology offers inherent commercial advantages over other products. CyPath® is cheaper to make, more stable, and simpler to use in the commercial laboratory environment.

Radiology technology including low-dose spiral computed tomography (LDCT), recently received medical attention as the recommended screening tool for individuals at high risk for lung cancer.  Studies reveal a very high (up to 97%) false positive rate in single imaging.  The high false positive rates in detecting lung cancer in heavy smokers using LDCT confirms a need for a simple, non-invasive and inexpensive testing method used in conjunction with LDCT to minimize emotional and financial costs associated with false positive results and lessen physical harm from surgical resection of benign lesions.

Genomics, proteomics and methylation are leading-edge science.  Researchers have recently announced advancement in these technologies and anticipation that diagnostic tests may be available for commercialization with five years. Biomoda believes genomic, proteomic and methylation technologies will be used most often to define an individual’s risk profile for contracting cancer and may work as tools to determine which patients can benefit from Biomoda’s diagnostic technology. Accurate risk stratification is a critical component of any effective screening protocol, and advances in genomics and proteomics are expected to greatly enhance this capability.
 
CyPath® will be a stand-alone early-stage diagnostic tool as well as a complementary product to diagnostic tools currently used to detect cancer. Its clear advantage over current diagnostics is the non-invasive collection of body fluids to retrieve adequate cells for incubation in the CyPath® labeling solution. CyPath® is a front-end diagnostic and screening tool and an aid in determining whether or not more expensive and specialized tests are warranted. Our product can be highly valuable to physicians by optimizing and expanding current medical practices by offering a simple, non-invasive diagnostic test to detect cancer.
 
 
Patents
 
Biomoda’s U.S. Patent portfolio includes:
·  
U.S. Patent 6,838,248, titled “Compositions and Methods for Detecting Pre-Cancerous Conditions in Cell and Tissue Samples Using 5, 10, 15, 20-Tetrakis (Carboxyphenyl) Porphine” which was issued on January 4, 2005; 
 
·  
U.S. Patent 7,384,764, titled “Method for Prognosing Response to Cancer Therapy with 5,10,15,20-Tetrakis (Carboxyphenyl) Porphine” which was issued June 10, 2008 and its Continuation-in-Part patent with the same name, 7,960,138 issued June 14, 2011;
 
·  
U.S. Patent 7,670,799 titled “Method for Making 5, 10, 15, 20-Tetrakis (Carboxyphenyl) Porphine (TCPP) Solution and Composition Comprising TCPP” which was issued on March 2, 2010;
 
·  
Allowed U.S Patent Application 12/715,627 titled “Method for Detecting and Prognosing Pre-Cancerous cells with 5, 10, 15, 20-Tetrakis (Carboxyphenyl) Porphine” filed March 2, 2010; and

·  
Pending U.S. Patent Application 12/839,283 titled “System and Method for Analyzing Samples Labeled with 5, 10, 15, 20 Tetrakis (4-Carboxyphenyl) Porphine (TCPP)” which provides a quantitative method for reading tissue samples for signs of malignant cells based on flow cytometry and dark-field microscopy which was filed on July 19, 2010;

On November 2, 2011, we filed an application for a new U.S. Patent. The Utility Patent describes systems and methods for an innovative stable, narrow-band light source to excite fluorophores such as TCPP. This narrow-band fluorophore exciter will increase the accuracy, sensitivity and specificity of the CyPath® diagnostic assay for lung cancer in both epifluorescent microscopy and flow cytometry.

On March 15, 2011, the Canadian Intellectual Property Office awarded Biomoda Canadian patent 2,429,526 entitled "Compositions and Methods for Detecting Precancerous Conditions in Cells and Tissue Samples using 5, 10, 15, 20 Tetrakis (Carboxyphenyl) Porphine." This patent is similar to the U.S. Patent awarded in 2005.  
 
On June 20, 2011, the Japan Patent Office granted Patent Application No. 2008-266490, “Compositions and Methods for Detecting Pre-Cancerous Conditions In Cell And Tissue Samples Using 5, 10, 15, 20-Tetrakis (Carboxyphenol) Porphine,” which is similar to Biomoda’s U.S. patent 6,838,248.
 
In January 2012, the European Patent Office (“EPO”) granted Biomoda’s patent application for using the proprietary CyPath® technology to detect cancer and pre-cancerous cells in body fluid and tissue samples. Titled “Composition and Methods for Detecting Pre-Cancerous Conditions In Cell And Tissue Samples Using 5, 10, 15, 20-Tetrakis (Carboxyphenol) Porphine,” EPO patent 1364044 is similar to Biomoda’s U.S. patent 6,838,248, which was issued in 2005. Foreign equivalents are now effective in Canada, Mexico, Japan, Australia and Europe.
 
Biomoda filed Patent Cooperation Treaty (“PCT”) Application PCT/US10/42482 titled “System and Method for Analyzing Samples Labeled with 5, 10, 15, 20 Tetrakis (4-Carboxyphenyl) Porphine (TCPP)” on July 19, 2010. The PCT process provides a standard patent application for the countries that are signatories to the treaty.

Biomoda owns U.S. registrations for the marks CyPath®, CyDx® and “Biomoda.” The Company has also received registrations for the marks Biomoda®, CyPath® and CyDx® in the European Union, and the World Intellectual Property Organization has registered “Biomoda” as a world trademark as of November 10, 2010.
 
Suppliers

The Company has identified several suppliers for all key components of our lung cancer diagnostic assay that can provide sufficient quantities for commercialization of the assay. Discussions continue with these suppliers based on the current stage of our development.

Research and Development Activities

Biomoda’s research is undertaken in collaboration with universities, scientists, research institutions, and medical facilities domestically. The Company is working toward further research and clinical trials which Biomoda anticipates will expand upon current and future collaborations. Biomoda’s diagnostic test can be used for other tissue and body fluid samples, and Biomoda intends to create and market products to diagnose and screen for other prevalent cancers, including breast, cervical, CTC, bladder, oral, colorectal and prostate. Toward that end, Biomoda anticipates developing protocols and assembling a study team for feasibility studies on the use of CyPath® to address other cancers.
 
 
The Company plans to complete internal optimization studies prior to launching the pivotal clinical study to enhance the commercial utility of the CyPath® diagnostic assay. This research and development (“R&D”) includes automation of sample reading, improving methods for the non-invasive collection of sputum samples, advancing understanding and application of fluorescent microscopy in relation to its ability to identify cancer cells, and developing strategies to enter the European market, including filing for approval of a CE mark. Optimizing the assay and automating the process for reading CyPath®-labeled cells will lead to lower cost and greater accuracy in a high-throughput clinical setting. This research will be supported by cooperative agreements between the Company and major medical and scientific research institutions with the assistance of medical and scientific experts on our research team.
 
Employees

As of December 31, 2011, the Company had four full-time employees. Biomoda has contracts for services on various projects on an ongoing or as-needed basis.
 
Maria Zannes is Chief Executive Officer and Chairman of the Board. Ms. Zannes has more than 30 years of management experience in business and industry. After serving as President of the Energy Recovery Council, a national waste-to-energy trade group in Washington, D.C., for 10 years, Ms. Zannes began a consulting practice for private clients in the medical, environmental and energy industries. She is a research associate with Columbia University Earth Engineering Center and co-founder of two research centers at Columbia. Ms. Zannes is a director and founder of American Homecoming Foundation, a non-profit organization directed at helping homeless veterans. Previously, she worked as General Manager for ECOS Corporation, a subsidiary of Burlington Environmental, and Project Manager for Wheelabrator Technologies, Inc., a subsidiary of Waste Management. Ms. Zannes began her career as a journalist before joining the office of Congressman Charles Wilson (D-Texas) as legislative aide and press secretary. Ms. Zannes is licensed to practice law in New Mexico and is an inactive member of the Washington State Bar Association. 

John J. Cousins is President, Treasurer, CFO, Controller and Director. Mr. Cousins holds undergraduate degrees from Boston University and the Lowell Institute School at the Massachusetts Institute of Technology and earned an MBA from the Wharton School, University of Pennsylvania. He began his business career as a design engineer for Ampex Corporation, a manufacturer of broadcast and computer equipment, and the American Broadcasting Company television network. He was named vice president of Cimarron Business Development Corporation, a southwest regional merchant and investment banking operation in 1990. In 1996, Mr. Cousins became president of Terra Firm, a business consulting firm. Mr. Cousins is a Director of American Homecoming Foundation, a non-profit organization created to help homeless veterans. Mr. Cousins is also a Director and Vice President of New Mexico Biotechnology and Biomedical Association (NMBio), an affiliate of the national Biotechnology Industry Organization. Mr. Cousins has been President, Treasurer, Controller and a Director of Biomoda since 2002.
  
Timothy Peter Zannes is Vice President and General Legal Counsel and Corporate Secretary. Mr. Zannes holds a law degree from the University of New Mexico, is a member in good standing of the New Mexico Bar and contributes 19 years experience as a lawyer.
 
Verrity Gershin is Office Manager. Ms. Gershin graduated from the University of New Mexico with a B.U.S. degree in May 2008. With 12 years experience in accounting, corporate filings and corporate administrative support, Ms. Gershin assisted with the Company’s initial public offering and helps maintain regulatory compliance.
 
 
Board of Directors

Maria Zannes, Chairman.

John J. Cousins, Director.

David Lambros is a Director. Mr. Lambros was the elected law director of Brook Park, Ohio, and presently serves as the law director of the Village of Valley View and the Village of Kelley’s Island, Ohio. As law director, he serves as the chief legal counsel to cities negotiating with corporations and business, and is an expert in municipal law. Mr. Lambros has practiced law for more than 25 years and served on various boards, including Commerce Exchange Bank and Southwest General Hospital. He presently is a director on the Systems Board at Southwest General Hospital, a multi-million dollar company.

Lewis White is a Director. Mr. White is a major shareholder of Biomoda and serves as director and CEO of New Energies Nebraska, LLC, a subsidiary of Standard Alcohol Company. He has also been a real estate investor, principal of a food services business catering to niche markets and an employee of the State of Nebraska. Mr. White attended the University of Nebraska at Omaha where he majored in Business Administration.
 
Contracts

The Company has contracted with Medi-Pharm Consulting, LLC, of New York, New York, for strategic business development and growth services.  Medi-Pharm Consulting is a strategic business company whose team consists of the experienced and respected professionals in the healthcare industry who together represent more than 100 years of experience involving pharmaceuticals, biotechnology, healthcare services and technology, medical devices and equipment.  Medi-Pharm will assist the Company with strategic partnerships and positioning for investment and growth.

The Company has contracted with Gordon Bennett of Albuquerque, New Mexico, for fluorescent microscopy services. Mr. Bennett has a B.S. in Physics as well as a J.D. from the University of New Mexico. His background is in photonics and electronics. He has been adjunct faculty at the College of Santa Fe and has held the Chair in Photonics and Biophotonics at Central New Mexico Community College. He is currently a member of the Optical Society of America and the New Mexico State Bar.

The Company has contracted with Christiana Care Health Services of Newark, Delaware, for the services of Thomas L. Bauer, MD, thoracic surgeon and cancer researcher, to be the national Principal Investigator (“PI”) overseeing the Biomoda clinical studies for early lung cancer detection. Dr. Bauer has led several lung and esophageal cancer studies. Dr. Bauer partners with Dr. Lara Patriquin, a diagnostic radiologist in Albuquerque, who is serving as the local PI for the Company’s clinical studies.

The Company has contracted with Quintiles Consulting in Rockville, Maryland, for regulatory consulting and the design of clinical studies of Biomoda’s proprietary test for detection of early-stage lung cancer. Quintiles Consulting (www.quintiles.com) is the regulatory consulting unit of Quintiles Transnational Corp., a global corporation that provides a broad range of professional services in product development, financial partnering and commercialization for the pharmaceutical, biotechnology and medical device industries.
 
 
The Company has contracted with Regulatory & Clinical Research Institute (“RCRI”), Inc. in Minneapolis, Minnesota, to serve as the Contract Research Organization (“CRO”) for the ongoing clinical studies of the CyPath® assay. RCRI (www.rcri-inc.com) provides medical device, in-vitro diagnostic and biologics companies with expertise in regulatory affairs, clinical trial design and management, database development, reimbursement strategy, health economics, quality systems and compliance, biostatistics and venture capital due diligence.
 
The Company has signed a Memorandum of Understanding with the University of Texas Health Science Center at San Antonio in San Antonio, Texas, to collaborate on research to optimize the CyPathâ assay.

The Company has contracted with Integritas, LLC of San Antonio, Texas, for business development in the state of Texas.

The Company has contracted with Patrick Sweeney of Cleveland, Ohio, for business development in the state of Ohio.

The Company has retained Sichenzia Ross Friedman & Ference, LLP in New York, New York, to provide legal counsel on securities law and SEC-related matters.

Pilot Clinical Study Update

Biomoda is seeking U.S. Food and Drug Administration (“FDA”) approval of its cytology-based diagnostic technology as a Class III medical device under the Pre-Market Approval ("PMA") process.  
 
An early-stage lung cancer screening program for New Mexico veterans based on the Biomoda technology was funded by the New Mexico State Legislature and administered by the New Mexico Department of Veterans Services and the New Mexico Institute of Mining and Technology. The screening program, the first large-scale study of Biomoda’s CyPath® investigational-use-only (not yet FDA-approved) diagnostic, was the foundation of the pilot clinical trial. Biomoda received full payment of a government contract for reimbursement of research and development costs of $1.3 million for fiscal year ended June 30, 2009, related to this study.
 
 
On March 5, 2009, the Company received approval for the pilot clinical trial from an independent Institutional Review Board ("IRB"). Biomoda’s cytology-based diagnostic technology had previously shown 100 percent sensitivity and 100 percent specificity during internal testing on a small sample of patients. 
 
Thomas L. Bauer, MD, cancer researcher and chief thoracic surgeon with the Christiana Care Health System in Delaware, is the national Principal Investigator (“PI”) overseeing the pilot clinical study. Dr. Bauer has led several lung and esophageal cancer studies.  Dr. Bauer is working with Lara Patriquin, MD, a diagnostic radiologist in Albuquerque, who serves as the Albuquerque PI for the pilot clinical study, and David Hill, MD, the PI for the site in Waterbury, Connecticut. The team of experts that worked with Biomoda on the clinical study included representatives from Quintiles, RCRI and Radiology Associates of Albuquerque. The New Mexico Department of Veterans Services and Black Veterans Association of New Mexico assisted with outreach and recruitment.

Study participants provided deep-lung sputum samples to be screened for the presence or absence of cancer cells. Sputum samples were processed onto microscope slides and incubated in the CyPath® labeling solution which binds to cancer cells. Cells on the slides labeled with CyPath® were analyzed under a microscope for unique fluorescent signature and intensity. Sample adequacy was determined by Pap stain analysis, and study participants underwent CT scans which were read by independent radiologists under the International Early Lung Cancer Action Program (“I-ELCAP”) Enrollment and Screening Protocol. Results based on analysis of the sputum samples labeled with the investigational CyPath® assay in the Biomoda lab were compared to the CT scan diagnostic results of high-risk participants and CT scan and other diagnostic results of cancer patients. 

Veterans recruited for the pilot study were “20 pack year” smokers, individuals who have smoked the equivalent of one pack a day for 20 years or two packs a day for 10 years. In September 2009, Biomoda added a longitudinal component to the pilot clinical trial, which will provide additional data on the efficacy of the Biomoda diagnostic. The pilot clinical study focused on screening military veterans because they may be at least 25 percent more likely to develop lung cancer and die from the disease than the general population, according to a U.S. Department of Defense report.

The pilot clinical trial also included analysis of a cohort of patients with a confirmed diagnosis of lung cancer who had not yet begun treatment for the disease. Biomoda contracted with Christiana Care Health Services and Waterbury Pulmonary Associates Research for sputum sample procurement for the clinical trial’s positive control group. In October 2010, Biomoda reopened patient enrollment and sample collection for the cancer cohort of the pilot study after comprehensive analysis by the medical team of CT scans of patients revealed that some patients enrolled in the study who were suffering from recurrence of lung cancer did not display tumors inside the lung cavity as required by the study protocol.
 
Enrollment and sample collection for the positive control cohort was completed in February 2011. Top-line results for the pilot study released on March 30, 2011, demonstrated that CyPathâ is a significant new biomarker for lung cancer. Sensitivity of the assay was determined at 77% with specificity at 58% accounting for patient factors, and an overall accuracy of 81.3% in the ability to correctly classify groups of study participants into the cancer or high-risk cohorts.  A Receiver Operating Characteristic (ROC) analysis of the sensitivity and specificity was shown to have an associated “p value” of less than .001, resulting in a statistically significant finding of CyPath®’s ability to discriminate between high-risk and cancer groups. Complete data from the pilot study has been submitted for publication in accordance with standard peer review. Dr. Bauer expects to present findings and results at appropriate medical conventions and events.
 
Biomoda has begun preliminary design and coordination for the pivotal clinical trial of our in-vitro diagnostic for early-stage lung cancer. The multi-site pivotal trial will include up to 3,500 patients and will be designed to yield data and analysis sufficient for FDA approval of the assay for commercial use in the United States. The Company expects to complete internal studies focused on optimization of the assay prior to opening pivotal clinical trial sites. These studies include automation using flow cytometry to read the entire sputum sample efficiently, improving methods for the non-invasive collection of sputum samples, and advancing understanding and application of fluorescent microscopy in relation to its ability to identify cancer cells.
 
 
Available Information

The Company files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy and information statements and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended. The public may read and copy these materials at the  Public Reference Room of the Securities and Exchange Commission (“SEC”) at 450 Fifth Street NW, Washington, DC 20549. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding the Company and other companies that file materials with the SEC electronically. The Company’s headquarters are located at 609 Broadway NE, Albuquerque, New Mexico. Its telephone number is (505) 821-0875. The mailing address is 609 Broadway NE, Albuquerque, NM 87102.

ITEM 1A. RISK FACTORS

The Company is competing against companies with the financial and intellectual resources and expressed intent of performing rapid technological innovation and substantial scientific research. The Company's resources are limited and must be allocated to focused objectives in order to succeed.

The area of biopharmaceutical research is subject to rapid and significant technological changes. Developments and advances in the medical industry by either competitors or neutral parties can affect the Company's business in either a positive or negative manner.

Developments and changes in technology that are favorable to the Company may significantly advance the potential of the Company's research, while developments and advances in research methods outside of the methods the Company uses may severely hinder or halt completely the Company's development.

Before marketing any of its products, the Company will need to complete multiple clinical investigations of each product. There can be no assurance that the results of such clinical investigations will be favorable to the Company. During each investigative study and prior to its completion, the results of the investigations will remain blinded to ensure the integrity of the study. The Company will not know the results of any study, favorable or unfavorable to the Company, until the study has been completed. Such data must be submitted to the FDA as part of any regulatory filing seeking approval to market the product. Even if the results are favorable, the FDA may dispute the claims of safety, efficacy, or clinical utility and not allow the product to be marketed. The sale price of the product may not be enough to recoup the amount of our investment in conducting the investigative studies.

Biomoda is a small company in terms of employees, technical and research resources, and capital. These factors could hinder the Company's ability to meet changes in the medical industry as rapidly or effectively as competitors with substantially more resources.

Costs of complying with regulatory and legislative matters such as the Clinical Laboratory Improvement Amendments (“CLIA”), which regulates the quality and reliability of medical testing in the United States, and changes to regulations governing FDA approval of clinical devices, as well as adverse changes in zoning laws, tax laws, or other laws affecting the medical and diagnostic industry may prove to be a major obstacle, with respect to both time and costs, in the Company's research and development.

The timing of regulatory filings and approvals, if any, for the Company's products are made less certain by the Company’s intention to market its products throughout the world. Numerous regulatory agencies regulate the sale of diagnostic and therapeutic products, and these agencies may be affected or influenced by criteria materially different than those of the FDA. The sale of the Company's products may be materially affected by the policies of these regulatory agencies or the domestic politics of the countries involved. Biomoda has not applied for and does not now have the approval of any foreign country to sell our products for diagnostic or therapeutic use.
 
Our products are subject to FDA approval and to post-approval FDA reporting requirements.
 
 
ITEM 2. PROPERTIES

The Company’s Research and Development facilities are located in Albuquerque, New Mexico, under a month-to-month lease at approximately $3,700 per month. R&D is housed in approximately 1,300 square feet that includes two state-of-the-art laboratories, where primary research, assay validation and pre-clinical work was conducted, and four administrative offices. Pending additional financing, Biomoda will expand its laboratory facilities in 2012 in order to provide reproducibility for our clinical pivotal trial and thereafter as needed to respond to research and sales demand. For the expanded development phase, no manufacturing facilities will be needed. For the production phase, Biomoda plans to utilize contract manufacturers and suppliers and expects to expand to allow for the manufacture of patient collection kits as appropriate.

ITEM 3. LEGAL PROCEEDINGS

 On April 22, 2009, Biomoda, Advanced Optics Electronics, Inc. (“ADOT”), and Leslie S. Robins (“Robins”) entered into a Settlement Agreement and Release (“Settlement”) to resolve all claims in the pending federal lawsuit entitled Advanced Optics Electronics, Inc., et al. v. Leslie S. Robins, et al. No. CIV-2007-00855, JB/DJS, U.S. District Court for the District of New Mexico and two related suits. As described below, the Settlement effectively separates Biomoda from ADOT and Robins and cedes control of ADOT to Robins.
 
Pursuant to the Settlement, in addition to executing a release in favor of Biomoda, Robins took the following action:
 
(a)  
paid $10,000 to Biomoda and delivered to Biomoda all Biomoda documents within his possession or control;
 (b)  
resigned from any position he may claim to hold or claim he should hold as an officer or director of Biomoda;
(c)  
transferred all shares to the Company of Biomoda stock currently held by Robins or by any family member or other person, corporation or entity in which he has any control, which consisted of 747,000 shares; and
(d)  
agreed not to acquire any Biomoda shares in the future.
 
In addition, on April 22, 2009, our President and current board member, John J. Cousins, resigned as a director and officer of ADOT, and Robins was appointed Chairman, Chief Executive Officer and President of ADOT. Pursuant to the Settlement, ADOT also transferred 1,231,575 Biomoda shares to the Company and released Biomoda from all ADOT claims, including claims related to an alleged promissory note dated May 1, 2002, in the amount of $1,030,748, which was disputed and previously written off by Biomoda as of the year ended December 31, 2008.
 
As the result of a federal lawsuit entitled Advanced Optics Electronics, Inc., et al. v. Leslie S. Robins, et al. No. CIV-2007-00855, JB/DJS, U.S. District Court for the District of New Mexico and two related suits, Biomoda has won default judgments against two Defendants, Alvin Robins and John Kearns, on all counts alleged and in favor of Biomoda.  Biomoda submitted a final statement of damages to the Court in November, 2009.  At the hearing on Aug. 4, 2010, defendant Alvin Robins failed to appear.  The Court allowed Biomoda's counsel to proceed with oral argument on the motion for a damages amount to be awarded to Biomoda.  Subsequently, in an opinion and memoranda issued on August 4, 2010, the Court allowed defendant Alvin Robins ten days to request further hearing on the matter before the Court and to answer the Biomoda argument for damages. Defendant John Kearns is deceased.  Biomoda has waived the right to pursue damages against Mr. Kearns' estate.
 
In Biomoda, Inc. v. Robins, U.S. Dist. Ct., D.N.M., No. CIV 07-0855 JB/GBW, the Court entered its Amended Final Judgment on March 16, 2011, for $35,000, with post-judgment interest, in favor of Biomoda and against Alvin D. Robins. No appeal from the Amended Final Judgment has been filed, and the deadline for doing so has passed. The judgment is therefore final and no longer reviewable on appeal. We intend to pursue collection of the judgment.
 
Biomoda does not know of any environmental liability affecting our Company that would have a materially adverse effect on our business. However, various federal, state and local environmental laws make our Company liable for the costs of removal or remediation of certain hazardous or toxic substances. These laws often impose environmental liability regardless of whether the owner was responsible for or knew of the presence of hazardous substances. The presence of hazardous substances, or the failure to properly remediate them, may adversely affect our ability to sell or rent a property or to borrow using the property as collateral. No assurance can be given that the environmental assessments of our property revealed all environmental liabilities, or that a material, adverse environmental condition does not exist on property leased by us.

Employees of the Company dealing with human blood and tissue specimens may be exposed to risks of infection from HIV, hepatitis, tuberculosis, and other blood- and specimen-borne diseases if appropriate laboratory practices are not followed. Although no infections of this type have been reported in the Company’s history, there can be no assurance that such infections will not occur in the future and result in liability to the Company
 
The testing, marketing, manufacturing, distribution, and sale of health care products could expose the Company to the risk of product liability claims. A product liability claim could have a material adverse effect on the business or financial condition of the Company. The Company does not currently maintain product liability insurance coverage. The Company intends to evaluate, depending on the circumstances that exist at the time, whether to obtain any product liability insurance coverage prior to the time that the Company engages in any marketing of its products. Even if the Company should elect to attempt to obtain such coverage in the future, there can be no assurance that product liability insurance will be available to the Company in the future on acceptable terms, if at all, or that such insurance will be sufficient to protect the Company against claims. Therefore, any uninsured loss could adversely affect our financial condition and results of operation.

ITEM 4. (REMOVED AND RESERVED)
 
 
PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

The Company’s stock began trading on November 21, 2006, on the OTC Bulletin Board under the symbol "BMOD" and closed on December 31, 2011, at $0.011 per share.
 
For the periods indicated, the following table sets forth the high and low bid prices per share of common stock. These prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.

   
Fiscal Year 2010
 
   
High
   
Low
 
First Quarter
 
$
0.47
   
$
0.18
 
Second Quarter
 
$
0.31
   
$
0.14
 
Third Quarter
 
$
0.25
   
$
0.15
 
Fourth Quarter
 
$
0.18
   
$
0.06
 

   
Fiscal Year 2011
 
   
High
   
Low
 
First Quarter
 
$
0.27
   
$
0.06
 
Second Quarter
 
$
0.10
   
$
0.02
 
Third Quarter
 
$
0.04
   
$
0.01
 
Fourth Quarter
 
$
0.02
   
$
0.01
 


Holders of our Common Stock

As of March 15, 2012, the Company estimates that there were approximately 2,100 shareholders.

Dividends

Biomoda has never paid cash dividends on our Common Stock and does not anticipate paying cash dividends in the near future.

Stock Option Grants

No stock options were granted in 2011.  Warrants were issued and are detailed in the appropriate section.
 
 
Penny Stock

Until Biomoda’s shares qualify for inclusion in the NASDAQ system, the public trading, if any, of our common stock will be on the OTC Bulletin Board. As a result, an investor may find it more difficult to dispose of, or to obtain accurate quotations as to the price of, the common stock offered. Our common stock is subject to provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock rule." Section 15(g) sets forth certain requirements for transactions in penny stocks, and Rule 15g-9(d) incorporates the definition of "penny stock" that is found in Rule 3a51-1 of the Exchange Act. The SEC generally defines "penny stock" to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. If our common stock is deemed to be a penny stock, trading in the shares will be subject to additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors. "Accredited investors" are persons with net assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse. For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such security and must have the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document, prepared by the SEC, relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information for the penny stocks held.

Equity Compensation Plans

Currently there is no Equity Compensation Plan. 

ITEM 6.  SELECTED FINANCIAL DATA

As a smaller reporting company, Biomoda is not required to provide the information required by this Item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
 
Company Overview

Biomoda has been in the development stage since it began operations on January 3, 1990, and has not generated any revenues from operations. There is no assurance of any future revenues. As of December 31, 2011, Biomoda had an accumulated deficit of $9,322,413 and a working capital deficit of $1,352,911. In addition, Biomoda did not generate any cash from operations and had no cash reserve dedicated to fund expenditures. These factors create an uncertainty as to Biomoda’s ability to continue as a going concern.
 
On July 19, 2006, the Company closed its offering of up to 6,000,000 shares of our common stock pursuant to a registration statement on Form SB-2 (the "Registration Statement") under the Securities Act of 1933, as amended, declared effective on February 11, 2005. The Company’s market maker filed Form 211 with NASD Regulation to initiate quotations in our common stock on the OTC Bulletin Board. The request was cleared on October 19, 2006.

Liquidity and Capital Resources
 
As of December 31, 2011, the Company had cash of $1,073.  
 
Commercialization of Biomoda’s initial lung cancer assay in the United States will require funding of $10 million for continuing research and development, obtaining regulatory approval and commercialization of our products.  This includes an investment of approximately $2 million to complete optimization programs designed to increase the sensitivity and specificity of its lung cancer assay.   Because Biomoda holds patents in the European Union, the Company plans to pursue a CE Mark in Europe that may provide for commercialization of CyPath® a year or more earlier than anticipated in the United States.  In order to execute our business plan for the next twelve months, the Company needs to obtain funding of $1,000,000 to continue operations and $2,000,000 to fully fund our planned expenditures in 2012.    
 
Funding will be sought from both private and public sources. Management is investigating all options to raise funding to meet our working capital requirements, including non-dilutive government grants and program awards. In the past, Biomoda was successful in obtaining government funding totaling $1.6 million from the State of New Mexico to assist in funding the pivotal clinical trial.  Our strategy includes securing similar non-dilutive funding and we are actively pursuing such funding at the federal and state levels in Ohio, Texas, Kansas and Missouri. There can be no assurance that such funding will be available and we presently have no commitments from parties to provide funding.
 
The additional capital will be used to continue optimization studies of the CyPath® assay, launch the pivotal clinical trial, prepare the technology for commercialization in the United States and Europe, and expand application of the assay to other cancers.
 
 
On March 17, 2010, the Company entered into a securities purchase agreement (the “Purchase Agreement”) by and between the Company and each purchaser identified on the signature pages thereto (collectively, the “March Purchasers”), pursuant to which Biomoda agreed to sell in a private placement transaction (i) 6,250,001 shares of our common stock, at a purchase price of $0.16 per share (the “Shares”), (ii) Series I warrants to purchase an additional 6,250,001 shares of common stock with an exercise price of $0.25 per share, subject to anti-dilution protection that could, in certain circumstances, reduce the exercise price and increase the number of shares issuable upon exercise of the warrant. (the “Series I Warrants”), (iii) Series II warrants to purchase up to an additional 3,750,001 shares of common stock, subject to adjustment as described in the related warrant agreement, on an automatic cashless exercise basis with an exercise price of $0.01 per share (the “Series II Warrants”), and (iv) Series III warrants to purchase an additional 6,250,001 shares of common stock with an exercise price of $0.16 per share (the “Series III Warrants” and together with the Series I Warrants and the Series II Warrants, the “Warrants”).

The Company received aggregate gross proceeds of $1,000,000 (net proceeds of $820,000 after the fees discussed below) from the sale of the Shares and the Warrants. The Shares and the shares of common stock issuable upon exercise of the Warrants are registered pursuant to a registration statement filed with the SEC (the “Registration Statement”) on April 9, 2010.

In connection with the private placement, the Company paid Lifetech, our placement agent, a cash fee of $100,000. LifeTech also received 625,000 Series I Warrants, 375,000 Series II Warrants and 625,000 Series III Warrants. In addition, LifeTech will receive 10% of the exercise price of all Series III Warrants which are exercised. The Company also paid legal fees of approximately $80,000 related to the private placement.

On June 22, 2010, the Company filed an Amended Form S-1 Registration Statement to cover 7,500,001 shares pursuant to the Purchase Agreement by and between the Company and the March Purchasers, pursuant to which Biomoda agreed to sell in a private placement transaction (i) 625,000 shares of our common stock, at a purchase price of $0.16 per share, and (ii) Series I warrants to purchase an additional 6,875,001 shares of common stock with an exercise price of $0.25 per share, subject to adjustment as further described below. The Amended Form S-1 Registration Statement became effective June 30, 2010.

Series I Warrants to purchase a total of 6,875,004 shares of common stock issued pursuant to the March 2010 private placement contained provisions that protect holders from declines in Biomoda’s stock price that could result in modification of the exercise price under the warrant based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815-40. As a result, these warrants were not indexed to the Company’s own stock. The fair value of these warrants was recognized as derivative warrant instruments and will be measured at fair value at each reporting period. Accordingly, during the period ended March 31, 2010, the Company charged the amount of $1,780,583 to stockholders' equity for the initial value of the derivative instruments.

During the third quarter of 2010, the Company issued common shares pursuant to the cashless exercise of 589,712 Series II Warrants, and as of December 31, 2010, no Series II Warrants remain outstanding. On August 6, 2010, the Series III Warrants expired without exercise.

During the three months ended June 30, 2011, Biomoda issued 1,560,000 common shares related to the exercise of Series I warrants for cash proceeds of $79,872 at a diluted exercise price of $0.0512 per share. 

During the three months ended September 30, 2011, Biomoda issued 6,500,000 shares pursuant to an exercise of Series I warrants in exchange for cash proceeds of $65,000 at a diluted exercise price of $0.01 per share.

During the three months ended September 30, 2011, Biomoda issued 2,041,667 shares pursuant to a cashless exercise of 3,500,000 Series I warrants.

As of December 31, 2011, the Company had 153,887,725 Series I Warrants outstanding due to the anti-dilution protection provisions.

On September 15, 2010, Biomoda, Inc. entered into a securities purchase agreement with two institutional investors (collectively, the “September Purchasers”), pursuant to which the Company sold in a private placement transaction (the “Financing”) for $500,000 in cash (i) $560,000 in principal amount of convertible notes (“Notes”), that matured on August 31, 2011, with a conversion price equal to the lesser of $0.25 or 80% of the average of the three lowest daily VWAPs for the 20 consecutive trading days prior to the date on which a Purchaser elects to convert all or part of its Note and (ii) 5-Year Warrants to purchase an aggregate of 2,000,000 shares of common stock with an exercise price of $0.25 per share. The Notes also include provisions that protect the holders from declines in the Company’s stock price. The interest rate is 10% per annum and accrues until either the maturity date or conversion of the Notes into shares of Biomoda common stock.
 
 
The September Purchasers contacted the Company to notify it of their intention to convert their Notes at the VWAP price that at the time of contact was calculated at $0.0501, and on March 11, 2011, the Company and the September Purchasers agreed to extend the look-back provision of the VWAP from 20 days to 40 days from the date of conversion.  The subsequent conversions of the Note took place between April 1, 2011 and July 12, 2011 at which time the Note was fully converted and extinguished.
 
Beginning on April 1, 2011 and continuing through July 12, 2011 the September Purchasers exercised their conversion rights in their Notes.  Due to the price protection provision in the Notes, the exercise price of each conversion was reduced.  The exercise price of the conversion on April 1, 2011 was at $0.0501 per share and the exercise price of the final conversion on July 12, 2011 was at $0.01 per share.  All of the outstanding convertible notes and interest were converted as of July 12, 2011, resulting in a total issuance of 27,175,810 common shares.
 
As of December 31, 2011, the Company had 50,000,000 5-Year Warrants outstanding due to the anti-dilution protection provisions.
 
On September 28, 2011, Biomoda filed a Form S-1 Registration Statement with the SEC for the resale of up to 206,387,725 shares of our common stock, including 203,887,725 shares of common stock issuable upon exercise of outstanding common stock purchase warrants currently exercisable at $0.01 per share.  This S-1 registration statement was declared effective on October 11, 2011. The selling stockholders may sell common stock from time to time in the principal market on which the stock is traded at the prevailing market price or in negotiated transactions. The selling stockholders may be deemed underwriters of the shares of common stock which they are offering. 
 
In November 2011, the Company filed two applications for funding under the Small Business Innovation Research (“SBIR”) program, a federal program that provides support for research and development of new or improved technologies with the potential to succeed as commercial products. If our applications are approved, any SBIR funding will be used to continue our optimization research to increase the sensitivity and specificity of the CyPath® assay for the detection and diagnosis of lung cancer in its early stages. The SBIR proposals are focused on adapting the CyPathâ technology to a liquid-based assay that can be read in a flow cytometry system and refining the use of fluorescent microscopy to stabilize the mechanism that excites the active ingredient in CyPathâ.

Overall, the Company decreased its cash position by $247,697 for the year ended December 31, 2011 (compared to a increase in its cash position of $228,729 for the year ended December 31, 2010), resulting from $366,329 used in the Company’s operating activities (compared to $1,237,675 of cash used in 2010), $54,161 used in the Company’s investing activities (compared to $72,521 used in 2010), and $172,793 in cash provided by financing activities (compared to $1,538,925 provided in 2010).

Cash Flows from Operating Activities - Net cash used in operating activities of $366,329 for the year ended December 31, 2011, decreased primarily due to the reduction of the Company’s operations in 2011 due to the limited cash holdings of the Company.

Cash Flows from Investing Activities - Net cash used in investing activities of $54,161 for the year ended December 31, 2011, decreased due to payments for equipment, patents and trademarks.

Cash Flows from Financing Activities - Net cash provided by financing activities of $172,793 for the year ended December 31, 2011, decreased primarily due to the proceeds from issuances of common stock and proceeds from issuance of convertible short term debt during the prior year.
 
 
Results of Continuing Operations

Biomoda has recorded no significant revenue from inception through December 31, 2011.

Operating expenses decreased by $828,776 to $1,154,762 during the year ended December 31, 2011, compared to $1,973,538 for the year ended December 31, 2010. This decrease was primarily due to decreased payroll, investor relations and public relations costs during 2011.

General and administrative expenses consist of expenses for executive and administrative personnel, facilities, consulting services, travel and general corporate activities. The decrease of these costs resulted from decreased payroll, investor relations and public relations costs. The Company expects general and administrative costs to increase in the future as our business matures and develops. Such costs were primarily funded through the issuance of our common stock and debt to conserve our cash resources.

Research and development expenses consist primarily of personnel expenses, consulting fees and lab expenses. Research and development costs decreased by $155,584 due to the completion of the pilot clinical study.  Biomoda believes that continued investment in product development is critical to attaining our strategic objectives and, as a result, expects product development expenses to increase significantly in future periods. Biomoda expenses product development costs as they are incurred.

Professional fees decreased from $260,933 in 2010 to $122,655 in 2011 due to decreased legal and other professional fees during 2011.

Other income (expense) decreased to $924,290 in 2011 compared to an expense of $1,317,757 in 2010.  Other income (expense) consists of interest, unrealized gains/losses on derivative liabilities and other income and expense. Interest expense decreased to $456,666 in 2011 from $851,621 in 2010. The decrease in interest expense was primarily related to the accretion of the discount on the Notes issued in September 2010, as well as the immediate expensing of $643,886 as additional interest expense in 2010, which represented the amount by which the fair value of the warrants issued in connection with the Notes and the Notes conversion option exceeded the principal amount. The Company also recognized $1,371,896 of unrealized (noncash) gain associated with the change in the fair value of the warrant and conversion derivative liabilities discussed above. There was $0 in Other Income in 2011 as compared to $244,479 in federal grant funding received by the Company under IRC section 48D in 2010 and which related to research and development expenses incurred during the Company’s 2009 fiscal year.

The Company had a net loss of $230,472 or $0.00 loss per share, and a net loss of $655,781 or $0.01 loss per share, for the years ended December 31, 2011 and 2010, respectively, due to items discussed above.
  
Inflation

Management believes that inflation has not had a material effect on the Company’s results of operations.

Off-Balance Sheet Arrangements

There are no off-balance sheet financing arrangements.
 
 
Critical Accounting Policies

Estimates

Critical estimates made by management are, among others, estimates for current and deferred taxes, recoverability of intangible assets, collectability of contract receivables, estimation of costs for long-term contracts, allowance for loss on contracts, value of patents and other intangibles, the valuation of derivative liabilities and the valuation of other assets. Actual results could materially differ from those estimates.

Research and Development

Research and development costs are charged to operations as incurred. The Company incurred approximately $255,000, $411,000 and $3,387,000 of research and development expenses (after study reimbursements) for the years ended December 31, 2011 and 2010, and for the period from inception through December 31, 2011.

Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. If the cost basis of a long-lived asset is greater than the projected future undiscounted net cash flows from such asset (excluding interest), an impairment loss is recognized. Impairment losses are calculated as the difference between the cost basis of an asset and its estimated fair value. There can be no assurance, however, that market conditions will not change which could result in impairment of long-lived assets in the future.
 
 
ITEM 8. FINANCIAL STATEMENTS
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and Shareholders
Biomoda, Inc.
(A Development Stage Company)
Albuquerque, New Mexico
 
We have audited the accompanying consolidated balance sheets of Biomoda, Inc. (a development stage company) as of December 31, 2011 and 2010, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years ended December 31, 2011 and 2010 and the period from January 3, 1990 (inception) to December 31, 2011. These financial statements are the responsibility of Biomoda, Inc.'s management. Our responsibility is to express an opinion on these financial statements based on our audits. The consolidated financial statements for the period from January 3, 1990 (inception) through December 31, 2005 were audited by other auditors whose reports expressed unqualified opinions on those statements. The consolidated financial statements for the period from January 3, 1990 (inception) through December 31, 2005 include total revenues and net loss of $23 and $3,101,245, respectively. Our opinion on the consolidated statements of operations, stockholders' deficit and cash flows for the period from January 3, 1990 (inception) through December 31, 2011, insofar as it relates to amounts for prior periods through December 31, 2005, is based solely on the reports of other auditors.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Biomoda, Inc. as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the two years then ended and for the period from January 3, 1990 (inception) to December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.
 
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company is a development stage company which has experienced significant losses since inception with no significant revenues. Also discussed in Note 2 to the consolidated financial statements, a significant amount of additional capital will be necessary to advance the development of the Company's products to the point at which they may become commercially viable. Those conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 2. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
GBH CPAs, PC
www.gbhcpas.com
Houston, Texas
April 18, 2012
 
 
BIOMODA, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
 
   
December 31,
   
December 31,
 
   
2011
   
2010
 
ASSETS
           
CURRENT ASSETS
           
Cash
  1,073     248,770  
Prepaid expenses
    1,271       2,708  
Deferred charges
    -       23,740  
TOTAL CURRENT ASSETS
    2,344       275,218  
                 
Deferred charges
    750       16,752  
Fixed assets, net of accumulated depreciation of
$19,228 and $17,459
    10,080       11,849  
Patents and trademarks, net of accumulated amortization
of $357,013 and $330,163
    192,126       161,815  
TOTAL ASSETS
  205,300     465,634  
LIABILITIES & STOCKHOLDERS' DEFICIT
               
CURRENT LIABILITIES
               
Accounts payable
  506,323     166,276  
Accrued liabilities
    404,744       84,149  
Advances from stockholders
    263,815       228,640  
Short-term debt
    180,373       112,520  
Convertible debt (net of discount of $0 and $461,271)
    -       169,942  
TOTAL CURRENT LIABILITIES
    1,355,255       761,527  
                 
LONG-TERM LIABILITIES
               
Note payable
    -       73,109  
Derivative liabilities - warrant instruments
    32,731       787,081  
Derivative liabilities - option instruments
    -       5,975  
Derivative liabilities - note conversion features
    -       741,589  
TOTAL LIABILITIES
    1,387,986       2,369,281  
                 
COMMITMENTS AND CONTINGENCIES
    -       -  
                 
STOCKHOLDERS' DEFICIT
               
Redeemable preferred stock- Series A; no par value; 2,000,000 shares authorized; cumulative and convertible;
liquidation and redemption values of $1.50 and $1.80 per share, respectively; no shares issued or outstanding
    -       -  
Redeemable preferred- Series B; no par value; 100 shares authorized; 
  liquidation and redemption values of $600; 100 shares issued and outstanding
    60,000       -  
Undesignated preferred stock; 2,000,000 shares authorized; no
  shares issued and outstanding
    -       -  
Common stock, no par value, 700,000,000 shares authorized;
  130,314,363 and 92,936,886 issued and 129,922,786 and
  92,545,311 outstanding, respectively
    8,080,960       7,189,527  
Treasury stock, at cost, 391,575 shares
    (1,233 )     (1,233 )
 Deficit accumulated during development stage
    (9,322,413 )     (9,091,941 )
Total stockholders' deficit
    (1,182,686 )     (1,903,647 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  205,300     465,634  
 
The accompanying notes are an integral part of these financial statements
 
 
BIOMODA, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 AND
FOR THE PERIOD FROM JANUARY 3, 1990 (INCEPTION) TO DECEMBER 31, 2011
 
 
Year Ended December 31,
 
January 3, 1990 (Inception) to
 
 
2011
 
2010
    December 31, 2011  
                   
Revenue
  $ -     $ -     $ 23  
                         
Operating expenses
                       
  Professional fees
    122,655       260,933       1,615,538  
  General and administrative
    748,431       1,281,440       7,000,739  
  Research and development, net of grants received
    255,057       410,641       3,386,701  
  Depreciation and amortization
    28,619       20,524       384,689  
                         
          Total operating expenses
    1,154,762       1,973,538       12,387,667  
                         
          Loss from operations
    (1,154,762 )     (1,973,538 )     (12,387,644 )
                         
Other income (expense)
                       
Gain on extinguishment of debt
    -       -       1,326,028  
Gain of sale of assets
    3,000       2,188       39,225  
Unrealized gain (loss) on derivative liabilities- warrant instruments
    712,526       1,993,792       2,706,318  
Unrealized gain (loss) on derivative liabilities- option intruments
    5,975       18,592       24,568  
Unrealized loss on derivative liability-note conversion features
    659,371       (90,221 )     569,150  
Other income
    -       244,479       244,479  
Interest income
    84       548       4,501  
Interest expense
    (456,666 )     (851,621 )     (1,849,038 )
                         
          Total other income (expense)
    924,290       1,317,757       3,065,231  
                         
Loss before provision for income taxes
    (230,472 )     (655,781 )     (9,322,413 )
                         
Provision for income taxes
    -       -       -  
                         
Net loss
  $ (230,472 )   $ (655,781 )   $ (9,322,413 )
                         
Basic and diluted earnings per common share
  $ 0.00     $ (0.01 )        
                         
Basic and diluted weighted average number of common shares outstanding
    113,304,382       88,366,234          
 
The accompanying notes are an integral part of these financial statements.
 
 
BIOMODA, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                January 3, 1990  
   
December 31,
   
(inception) to
 
   
2011
   
2010
    December 31, 2011  
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net loss
  $ (230,472 )   $ (655,781 )   $ (9,322,413 )
Adjustments to reconcile net earnings to net
cash used in operating activities
                       
    Depreciation and amortization
    28,619       14,691       378,856  
 Amortization of debt discount
    390,058       169,942       560,000  
 Amortization of deferred financing costs
    23,740       5,833       29,573  
    (Gain)/loss on sale of assets
    (3,000 )     (2,188 )     (4,830 )
    Stock based compensation
    25,000       732,300       3,998,076  
    Unrealized gain on derivative liabilities - warrant instruments
    (712,526 )     (1,993,792 )     (2,706,318 )
    Unrealized gain on derivative liabilities - options
    (5,975 )     (18,592 )     (24,567 )
    Unrealized gain on derivative liabilities - note conversion feature
    (659,371 )     90,221       (569,150 )
    Write-off of license fee
    -       -       1,250  
     Foreign currency translation adjustments
    -       -       3,247  
     Gain on extinguishment of debt
    -       -       (1,283,964 )
     Interest expense incurred on issuance of convertible debt
    -       643,886       643,886  
Changes in operating assets and liabilities
                       
     Prepaid expenses and other current assets
    1,437               1,437  
     Accounts receivable
    -       -       174,222  
     Other assets
    16,002       6,863       37,664  
     Advances on research grants
    -       (25,415 )     -  
     Accounts payable and accrued liabilities
    760,159       (205,643 )     1,604,524  
                         
        Net cash used in operating activities
    (366,329 )     (1,237,675 )     (6,478,507 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
     Proceeds from sale of equipment
    3,000       2,188       6,327  
     Purchase of equipment
    -       (11,872 )     (37,443 )
     Organizational costs
    -       -       (560 )
     Expenditures for patents, trademarks and licenses
    (57,161 )     (62,837 )     (566,136 )
                         
        Net cash used in investing activities
    (54,161 )     (72,521 )     (597,812 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
    Issuance of common stock for cash
    144,872       1,095,253       4,243,008  
    Proceeds from stockholders' advances
    35,175       13,499       224,406  
    Repayment of line of credit from affiliated entity
    -       -       (341,107 )
    Proceeds/repayments of short-term debt
    -       2,369       (104,954 )
    Proceeds/repayments of convertible short-term debt, net
    -       480,000       480,000  
    Proceeds from line of credit from affiliated company
    -       -       2,680,882  
    Proceeds/repayments of long-term debt, net
    (7,254 )     (52,196 )     (91,226 )
    Acquisition of treasury stock
    -       -       (13,617 )
                         
        Net cash provided by financing activities
    172,793       1,538,925       7,077,392  
                         
NET INCREASE IN CASH
    (247,697 )     228,729       1,073  
                         
Cash at beginning of period
    248,770       20,041       -  
                         
Cash at end of period
  $ 1,073     $ 248,770     $ 1,073  
                         
Supplemental cash flow information:
                       
    Interest expense paid in cash
  $ -     $ -     $ -  
    Income taxes paid in cash
  $ -     $ -     $ -  
                         
Non-cash investing and financing activities:
                       
    Accrued salaries converted to notes payable
  $ -     $ -     $ 479,484  
    Accrued salaries converted to preferred stock
  $ 60,000     $ -     $ 65,504  
    Derivative liability incurred through issuance of warrants
  $ -     $ 3,370,622     $ 3,370,622  
    Settlement of derivative liabilities
  $ 124,042     $ 1,057,699     $ 1,181,741  
    Interest converted to note payable
  $ -     $ -     $ 159,462  
    Common stock issued to extinguish related party debt
  $ -     $ -     $ 1,418,768  
    Common stock issued to extinguish related party debt
  $ -     $ 50,000     $ 50,000  
    Discount on note payable related to deferred financing costs
  $ -     $ 60,000     $ 60,000  
    Discount on note payable related to derivative conversion feature
  $ -     $ 500,000     $ 500,000  
    Conversion of notes payable and accrued interest to common stock
  $ 597,519     $ -     $ 597,519  
 
The accompanying notes are an integral part of these financial statements.
 
 
BIOMODA, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY
FOR THE PERIOD FROM JANUARY 3, 1990, (INCEPTION) TO DECEMBER 31, 2011
 
                                 
Accumulated
   
Total
 
                                 
Deficit During
   
Stockholders'
 
   
Common Stock
   
Preferred Stock
   
Treasury
   
Development
   
Equity
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Stock
   
Stage
   
(Deficit)
 
Inception
    -     $ -       -     $ -     $ -     $ -     $ -  
Issuance of Common Stock, June 26, 1991
    2,997,000       18,433                                       18,433  
Cumulative Net Loss for the period from January 3, 1990
 (date of inception) to December 31,1996
      (60,010 )     (60,010 )
Balance, December 31, 1996
    2,997,000       18,433       -       -               (60,010 )     (41,577 )
Issuance of Common Stock Warrants on December 31, 1997
       (100,952 warrants at exercise price of $.20)
    -       -                                       -  
Net loss
                                            (32,914 )     (32,914 )
Balance, December 31, 1997
    2,997,000       18,433       -       -               (92,924 )     (74,491 )
Issuance of Common Stock, January 20, 1998
    59,940       10,000                                       10,000  
Exercise of Common Stock Warrants on March 17, 1998
    100,952       20,190                                       20,190  
Issuance of Common Stock, April 15, 1998, net of stock
issuance costs
    631,578       276,350                                       276,350  
Issuance of Common Stock Options, April 15, 1998
      23,650                                       23,650  
Exercise of Common Stock Options, November 2, 1998
    62,237       23,670                                       23,670  
Net loss
                                            (295,948 )     (295,948 )
Balance, December 31, 1998
    3,851,707       372,293       -       -               (388,872 )     (16,579 )
Issuance of Common Stock, January 30, 1999
    180,000       87,300                                       87,300  
Issuance of Common Stock, for the month of March, 1999
    310,000       150,300                                       150,300  
Issuance of Common Stock, May 29, 1999
    51,546       25,000                                       25,000  
Issuance of Common Stock, June 2, 1999
    95,092       50,000                                       50,000  
Issuance of Common Stock, September 30, 1999
    51,546       25,000                                       25,000  
Issuance of Common Stock, December 29, 1999
    92,005       50,143                                       50,143  
Net loss
                                            (303,956 )     (303,956 )
Balance, December 31, 1999
    4,631,896       760,036       -       -               (692,828 )     67,208  
Exercise of Common Stock Options, February 24, 2000
    166,535       80,770                                       80,770  
Issuance of Common Stock, May 12, 2000
    253,609       56,000                                       56,000  
Exercise of Common Stock Options, June 8, 2000
    62,497       30,312                                       30,312  
Issuance of Common Stock, for the month of September, 2000
    96,745       21,086                                       21,086  
Exercise of Common Stock Options, November 3, 2000
    66,000       7,491                                       7,491  
Issuance of Common Stock for Services, December 8, 2000
    40,000       19,400                                       19,400  
Net loss
                                            (257,139 )     (257,139 )
Balance, December 31, 2000
    5,317,282       975,095       -       -               (949,967 )     25,128  
 
The accompanying notes are an integral part of these financial statements.
 
 
BIOMODA, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY
FOR THE PERIOD FROM JANUARY 3, 1990, (INCEPTION) TO DECEMBER 31, 2011
(Continued)
 
                                   
Accumulated
   
Total
 
                                   
Deficit During
   
Stockholders'
 
   
Common Stock
   
Preferred Stock
     
 Treasury
   
Development
   
Equity
 
   
Shares
   
Amount
   
Shares
   
Amount
     
 Stock
   
Stage
   
(Deficit)
 
Issuance of Common Stock for Services, January 25, 2001
    5,000       2,425                                 2,425  
Issuance of Common Stock, January 31, 2001
    160,000       24,000                                 24,000  
Issuance of Common Stock for Services, April 6, 2001
    15,000       7,276                                 7,276  
Issuance of Common Stock, for the month of April, 2001
    120,000       58,200                                 58,200  
Issuance of Common Stock, June 28, 2001
    20,000       9,700                                 9,700  
Issuance of Common Stock, for the month of August, 2001
    110,000       53,500                                 53,500  
Issuance of Common Stock, November 7, 2001
    10,000       5,000                                 5,000  
Net loss
                                        (372,655 )     (372,655 )
Balance, December 31, 2001
    5,757,282       1,135,196       -       -               (1,322,622 )     (187,426 )
Net loss
                                            (83,689 )     (83,689 )
Balance, December 31, 2002
    5,757,282       1,135,196       -       -               (1,406,311 )     (271,115 )
Exercise of stock options, July 11, 2003
    980,000       147,000                                       147,000  
Net loss
                                            (311,233 )     (311,233 )
Balance, December 31, 2003
    6,737,282       1,282,196       -       -               (1,717,544 )     (435,348 )
Issuance of Common Stock for Services, February 9, 2004
    35,000       5,250                                       5,250  
Exercise of Common stock Options, February 9, 2004
    60,000       30,000                                       30,000  
Issuance of Common Stock for Services, August 5, 2004
    85,000       12,750                                       12,750  
Exercise of Common stock Options, September 27, 2004
    200,000       30,000                                       30,000  
Net loss, December 31, 2004
                                            (758,945 )     (758,945 )
Balance, December 31, 2004
    7,117,282       1,360,196       -       -               (2,476,489 )     (1,116,293 )
Issuance of Common Stock for Services, May 27, 2005
    30,000       4,500                                       4,500  
Issuance of Common Stock for Services, October 12, 2005
    40,000       6,000                                       6,000  
Net loss, December 31, 2005
                                            (624,756 )     (624,756 )
Balance, December 31, 2005
    7,187,282       1,370,696       -       -               (3,101,245 )     (1,730,549 )
Issuance of Common Stock for Services, October 23, 2006
    690,000       544,500                                       544,500  
Issuance of Common Stock in exchange for Debt, October 23, 2006
    1,176,471       1,000,000                                       1,000,000  
Issuance of Common Stock for Services, November 30, 2006
    7,500       28,125                                       28,125  
Issuance of Common Stock for Services, December 15, 2006
    10,000       29,000                                       29,000  
Issuance of Common Stock for Services, December 26, 2006
    15,000       44,850                                       44,850  
Acquisition of Treasury Stock, June 30, 2006
                                   
        (9,000
            (9,000 )
Stock-Based Compensation
            35,042                                       35,042  
Net loss, December 31, 2006
                                            (1,807,312 )     (1,807,312 )
Balance, December 31, 2006
    9,086,253       3,052,213       -       -      
        (9,000
    (4,908,557 )     (1,865,344 )
 
The accompanying notes are an integral part of these financial statements.
 
 
BIOMODA, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY
FOR THE PERIOD FROM JANUARY 3, 1990, (INCEPTION) TO DECEMBER 31, 2011
(Continued)
 
                                 
Accumulated
   
Total
 
                                 
Deficit During
   
Stockholders'
 
   
Common Stock
   
Preferred Stock
   
Treasury
   
Development
   
Equity
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Stock
   
Stage
   
(Deficit)
 
Issuance of Common Stock for Services, January 2007
    131,000       259,500                               259,500  
Issuance of Common Stock, January 2007
    30,000       30,000                               30,000  
Issuance of Common Stock for Services, February 2007
    150,000       157,500                               157,500  
Issuance of Common Stock for Services, March 2007
    445,000       375,500                               375,500  
Issuance of Common Stock in exchange for Debt, March 2007
    86,786       73,768                               73,768  
Exercise of Options, March 2007
    2,000       1,000                               1,000  
Issuance of Common Stock for Services, April 2007
    724,062       455,559                               455,559  
Issuance of Common Stock in exchange for Debt, April 2007
    500,000       315,000                               315,000  
Issuance of Common Stock for Services, June 2007
    920,000       154,600                               154,600  
Issuance of Common Stock, June 2007
    343,000       41,667                               41,667  
Issuance of Common Stock for Services, July 2007
    141,000       15,700                               15,700  
Issuance of Common Stock, July 2007
    1,466,635       84,985                               84,985  
Issuance of Common Stock, August 2007
    1,636,166       53,943                               53,943  
Issuance of Common Stock for Services, September 2007
    160,000       12,800                               12,800  
Issuance of Common Stock, September 2007
    2,416,248       54,819                               54,819  
Issuance of Common Stock, October 2007
    1,557,730       36,457                               36,457  
Issuance of Common Stock in exchange for Debt, October 2007
    165,000       16,500                               16,500  
Issuance of Common Stock for Services, November 2007
    770,000       100,100                               100,100  
Issuance of Common Stock, November 2007
    16,190,967       445,674                               445,674  
Issuance of Common Stock for Services, December 2007
    90,140       21,634                               21,634  
Issuance of Common Stock, December 2007
    11,303,996       385,250                               385,250  
Stock-Based Compensation
            55,416                               55,416  
Net loss, December 31, 2007
                                      (2,307,051 )     (2,307,051 )
Balance, December 31, 2007
    48,315,983       6,199,585       -       -       (9,000 )     (7,215,608 )     (1,025,023 )
Issuance of Common Stock, January 2008
    3,887,100       155,077                                       155,077  
Issuance of Common Stock for Services, February 2008
    11,128,967       312,244                                       312,244  
Issuance of Common Stock for Services, February 2008
    1,500,000       180,000                                       180,000  
Issuance of Common Stock for Services, March 2008
    1,725,860       86,293                                       86,293  
Issuance of Common Stock, March 2008
    8,410,112       209,897                                       209,897  
Issuance of Common Stock, April 2008
    1,328,142       33,268                                       33,268  
Issuance of Common Stock for Services, April 2008
    25,000       1,250                                       1,250  
Issuance of Common Stock for Services, June 2008
    237,237       17,779                                       17,779  
Issuance of Common Stock for Services, July 2008
    244,000       12,200                                       12,200  
Issuance of Common Stock for Services, September 2008
    125,000       5,000                                       5,000  
Issuance of Common Stock for Services, October 2008
    47,188       1,888                                       1,888  
Issuance of Common Stock for Services, December 2008
    30,000       900                                       900  
Net loss, December 31, 2008
                                            (315,263 )     (315,263 )
Balance, December 31, 2008
    77,004,589       7,215,381       -       -       (9,000 )     (7,530,871 )     (324,490 )
 
The accompanying notes are an integral part of these financial statements.
 
 
BIOMODA, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY
FOR THE PERIOD FROM JANUARY 3, 1990, (INCEPTION) TO DECEMBER 31, 2011
(Continued)
 
                                 
Accumulated
   
Total
 
                                 
Deficit During
   
Stockholders'
 
   
Common Stock
   
Preferred Stock
   
Treasury
   
Development
   
Equity
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Stock
   
Stage
   
(Deficit)
 
Issuance of Common Stock for Services, January 2009
    30,000       1,200                               1,200  
Issuance of Common Stock for Services, June 2009
    30,000       1,200                               1,200  
Adjustment to Treasury Shares on June 30, 2009
            (9,000 )                 9,000             -  
Addition to Treasury Shares September 30, 2009
                                (4,617 )           (4,617 )
Issuance of Common Stock for Services, July 2009
    250,000       12,500                                 12,500  
Issuance of Common Stock for Cash, August 2009
    100,000       5,000                                 5,000  
Issuance of Common Stock for Services, August 2009
    100,000       7,000                                 7,000  
Issuance of Treasury Shares for Services August 2009
      220,000